Marco Simons's blog

In December, we won our appeal on behalf of indigenous Achuar communities from Peru who are suing Occidental Petroleum (Oxy) for toxic contamination; the Ninth Circuit Court of Appeals ruled that the case could continue in US courts.  As we expected, Oxy asked for reconsideration, filing a petition for rehearing.  Yesterday, the court granted the petition for rehearing--but we still won.

What's going on here?  Basically, the court granted the petition as a technical matter, because the judges did reconsider, and change, some parts of their opinion.  But they didn't change the result.  They still reversed the district court's ruling that the case should be litigated in Peru, and still allowed us to continue in US court.

The judges made some changes to their discussion of the statutes of limitations and some of the considerations in whether to send the case to Peru, such as whether the Peruvian courts are generally adequate to hear these kinds of cases.  These changes address some of Oxy's criticisms of the opinion, but they ultimately don't help the oil company.

So is this finally the end of this appeal?  Maybe; maybe not.  Oxy can now file another petition, asking the court for an "en banc" rehearing in front of a larger panel of eleven judges.  Those petitions rarely succeed, but in litigation, anything can happen.  For now, we're still winning, and the Achuar still have the right to pursue justice in US courts.

Document: Amended Ninth Circuit Opinion in Maynas Carijano v. Occidental Petroleum Corp.

When I returned to Washington D.C. this week, after a 10-day trip to Peru, the immigration officer asked me what my business had been there.  "I'm an attorney," I said. "I was meeting with clients." But this simple response hardly captures the full story.

For lawyers in the international human rights field, meeting with clients usually doesn't mean inviting them to our office. It often means visiting a refugee camp on the Thai-Burma border, or heading for a village in the Niger Delta.

In this case, it meant flying to Iquitos, the largest city in the Peruvian Amazon, followed by a two-day trip upriver on the Rio Marañon, the Rio Tigre, and then finally the Rio Corrientes, to reach the Achuar community of Pampa Hermosa.  It's another day up the Corrientes to reach the farthest community, Jose Olaya, scarcely 15 miles from the Peru-Ecuador border.

ERI represents these communities in a lawsuit in the US against Occidental Petroleum, alleging contamination from decades of oil operations in Achuar territory.  The remoteness of these communities, and the difficulty of meeting with our clients, certainly makes the case challenging, but it was actually one of the factors that motivated us to bring the case.

One of our Achuar plaintiffs, with her daughters

When corporations operate in most developed countries, and even in many cities in the developing world, they frequently assume that people affected by their operations will have access to information, media, and, if necessary, legal counsel.  That hasn't always been the assumption for remote corners of the Amazon, or other similarly inaccessible regions; companies sometimes expect that the local population won't have access to any remedies.  We're working to change that expectation.

Since February, Chevron has been facing what is probably the largest environmental judgment in history-- an $8 billion award from an Ecuadorian court for contaminating the Ecuadorian Amazon.  (That judgment is now available in English, below, courtesy of Chevron.)  They've gone on the offensive against this judgment on two fronts.  But they need to win not just these cases, but every other one that the plaintiffs might file.

The plaintiffs' strategy has become known through the release of the so-called "Invictus" memo.  That memo, drafted by law firm Patton Boggs for the Ecuadorian plaintiffs, outlines a global enforcement strategy.  The Ecuadorians can go after Chevron in the US, but they can also try to enforce the judgment in Argentina, Brazil, Venezuela, and dozens of other countries where Chevron operates or has assets.  Not surprisingly, Chevron is working hard to prevent that.

Chevron's first assault on the Ecuadorian case was an international arbitration against Ecuador, filed in September 2009.  (Although such arbitrations are typically secret, Chevron posted its complaint to its website.)  Under the guise of international investment law, Chevron wants to have the Ecuadorian government interfere in its own court system, to tell the courts that Chevron's not responsible for the pollution in the Amazon.

I think Chevron's case in the arbitration is thin.  Working with the International Institute for Sustainable Development and the Ecuadorian indigenous rights group Fundacion Pachamama, ERI filed an amicus brief with the arbitration tribunal last fall, arguing that the tribunal shouldn't even hear the case.  We learned last week that the arbitration tribunal rejected our brief, unfortunately--but it still hasn't decided whether it will hear Chevron's case.

From our friends at Global Witness comes news of a significant victory in the human rights case against Anvil Mining, which Global Witness and several other groups filed last fall in Quebec. The judge ruled that the case, which arises out of the Kilwa massacre in the Democratic Republic of the Congo, should proceed in Canada--rather than in the DRC or in Australia, where Anvil has offices.  The judge stated:

It is apparent ... that it is impossible to determine that the authorities of the Congo or of Australia would clearly be more appropriate for hearing the case. In fact, at this stage in the proceedings, everything indicates that if the court were to refuse to accept the application ... there would be no other possibility for the victims' civil claim to be heard.

Although ERI's cases have been litigated in the US, we've long been interested in seeing similar litigation proceed in other forums--and Canada is at the top of the list. (In fact, in law school I wrote a paper on "Canada as a forum for transnational human rights litigation," so I've been especially focused on developments there.)  We're thrilled that this case is moving forward--it's one more step toward expanding accountability mechanisms worldwide.

Investor-state arbitration (ISA) used to be a pretty obscure field.  Many free trade agreements include provisions that allow foreign investors to take a government to international arbitration if they're treated unfairly, such as if their property is expropriated.

Recently, however, multinational corporations have tried to use ISA to challenge environmental and human rights policies of developing countries, such as mining companies' attack on South Africa's black empowerment laws, Chevron's claim against the Ecuadorian government for alleged unfair treatment in environmental litigation in the Amazon, and Pacific Rim Mining's suit against El Salvador for refusing to issue exploration permits.

Now the Australian government has announced that it will no longer seek to include ISA clauses in trade and investment agreements.  Apparently the government is worried that its own policies might be at risk from challenges by foreign investors, but its statement expressly warns Australian businesses that "they will need to make their own assessments" about the risks of investing abroad.

I hope this is the start of a trend, as governments realize that giving corporations the right to challenge public policy in an international arbitration forum is maybe not such a good idea.

Before ISA, such cases could only be pursued internationally if the investor's claims were "espoused" by their own government--for example, the U.S. government could challenge Ecuador's actions if they thought Chevron was being treated unfairly, but Chevron could not.  This meant that such challenges were uncommon and they were subject to international political constraints.

In February I noted that a Brazilian court had suspended plans to build the Belo Monte dam, a giant project in the heart of the Amazon.  Back in November, several groups also filed a complaint with the Inter-American Commission on Human Rights charging that the dam would violate indigenous rights and other human rights protections.  This week, we learned that the Inter-American Commission issued a preliminary order requesting that Brazil suspend the project; our partner Amazon Watch issued a press release yesterday.

The Inter-American Commission is one of the two major human rights bodies of the Organizational of American States (OAS).  The Inter-American Commission has jurisdiction over all OAS states--which includes nearly every country in the Western hemisphere--but its decisions are not legally binding.  Many countries do take the Commission's findings seriously, but only the Inter-American Court of Human Rights can issue binding judgments.

On the Belo Monte dam, the Commission issued what are known as "precautionary measures."  Essentially, they are asking Brazil to take steps to avoid causing harm to the petitioners before the Commission can have a full hearing on the case.  We hope that Brazil follows the Commission's guidance; mega-dams projects should not be rushed into, especially in a region as ecologically fragile and with such human significance as the Amazon.

I've been traveling a bit recently, so I haven't been blogging about ongoing developments in the Chevron/Ecuador litigation and the Kiobel corporate human rights case. Below are updates on both.

Chevron in Ecuador: A Verdict, An Injunction, and New Corruption Evidence

As Jonathan noted a few weeks ago, the plaintiffs won an $8 billion verdict against Chevron in Ecuadorian court for contaminating the Amazon.  On Monday of this week, however, federal judge Lewis Kaplan in New York issued a preliminary injunction that seeks to prevent the plaintiffs and their lawyers from enforcing the judgment.  (This replaces the restraining order that I discussed earlier.)

But that's not all.  Although there have long been allegations that Chevron's hands are not clean when it comes to the Ecuador case, some more hard evidence of improper conduct recently surfaced.  California's legal paper, the Daily Journal, reported yesterday that Chevron's lawyers have been paying huge sums--between $170,000 and $340,000--to Diego Borja, one of the men who apparently tried to entrap the Ecuadorian judge into accepting bribes.

The Daily Journal article linked above requires a subscription, but it implicates Bob Mittelstaedt, the lead lawyer at Jones Day, one of the firms defending Chevron: "Mittelstaedt has been one of the partners facilitating Chevron's payments to Borja." Paying a witness beyond necessary costs is generally highly unethical for a lawyer, and potentially criminal. (Bob Mittelstaedt and Jones Day also defended Chevron in the Bowoto v. Chevron litigation.)

On Friday I heard from our colleagues at Amazon Watch that a Brazilian federal court had issued an order suspending plans to build the Belo Monte dam, a massive project that is intended to be the third-largest dam in the world and is likely to disrupt critical Amazonian waterways and threaten the survival of indigenous groups.  The judge apparently found that the requirements of environmental law had not been met.

Amazon Watch has been campaigning on the Belo Monte dam for quite some time, and their website has a wealth of information about the project and the campaign to stop it.  Personally I'm pleased to see judges in the Amazon region taking environmental law seriously and not simply bowing to powerful interests, first with the Chevron judgment in Ecuador earlier this month, and now with the latest ruling on the Belo Monte dam.

Chevron's going all-out in its lawsuit against the Ecuadorian plaintiffs and their lawyers who've sued Chevron over environmental devastation in the Amazon.  The company wasted no time in asking for a temporary restraining order (TRO) and preliminary injunction preventing the plaintiffs and their lawyers from enforcing an Ecuadorian judgment or attaching Chevron's assets.

Today, Judge Kaplan, the federal judge presiding over the case, granted a 14-day TRO and an expedited schedule for a hearing about a preliminary injunction.  This was no surprise; last week Judge Kaplan issued an "order to show cause" (OSC) which basically said that Chevron had made a good case for a TRO and the Ecuadorians needed to prove why it should not issue.

It's not clear, though, how Chevron's made an adequate showing as to why it needs these emergency orders.  The Ecuadorian court has not issued any kind of judgment against Chevron, and it's not clear when such a judgment will be issued.  As far as I know, the plaintiffs have not tried to attach any of Chevron's assets.

Under Rule 65 of the federal rules, the judge is only supposed to issue a TRO if Chevron is facing "immediate and irreparable injury, loss, or damage."  It's highly questionable whether Chevron's actually met this standard.

Furthermore, Chevron's supposed to pay "security" to the court--such as a bond--that would be sufficient to cover the plaintiffs' losses if it turns out the TRO was issued improperly.  So far I haven't seen any indication that Judge Kaplan is going to require this.

Nor is it even clear what the legal impact of Judge Kaplan's ruling is.  The TRO rules don't give the court jurisdiction over anyone that it wouldn't otherwise have.  So it doesn't answer questions about why the Ecuadorians, or most of their lawyers, would be subject to the jurisdiction of a New York federal court.  Almost none of the people that Chevron has sued have actually showed up in Kaplan's court yet, which could be a strategy to fight the court's jurisdiction. 

On Friday, the Second Circuit Court of Appeals, in New York, denied rehearing in the Kiobel case, in which it had ruled that corporations could not be sued for violations of international human rights law under the Alien Tort Statute (ATS). 

The court split 5-5 on rehearing the case (for some reason, Judge Lohier, who joined the court in December, did not vote, although he was entitled to do so).  Four judges issued a dissent from the denial of en banc rehearing.

Additionally, the judges on the original panel--Cabranes, the author, Jacobs, the Chief Judge who joined Cabranes, and Leval, who disagreed--also filed additional opinions.  Most extraordinary is Chief Judge Jacobs's opinion, which essentially states that--apart from the legal analysis given in Judge Cabranes's actual decision--he joined the decision due to a number of policy reasons. 

This may undermine the weight that other courts give to Kiobel, because, as Judge Leval points out in his response to Jacobs, judges are generally supposed to stick to the law and leave the policy to other branches of government.

But the current implications here are quite bad, especially for litigants in the Second Circuit--which includes the plaintiffs in the Apartheid cases, among others.  Unless the court takes a later case for en banc hearing or rehearing, the only avenue for those litigants is the Supreme Court.  The decision does not directly affect litigants elsewhere in the country, but still could be influential.